Complete Report

Summary

Medicare guidance requires suppliers to use the KL modifier on all claims for mail-order diabetic testing supplies, which are reimbursed at a lower amount than supplies provided at local supplier storefronts.

We found that for calendar year 2011, Advanced Diabetes Supply (ADS) submitted claims for diabetic testing supplies without the KL modifier in accordance with Medicare billing requirements. Of 100 sampled line items, 99 were properly submitted without the KL modifier because ADS used company-owned vehicles to deliver diabetic testing supplies to Medicare beneficiaries at their homes or to warehouse stores for beneficiaries to pick up. Claims for these supplies do not require use of the KL modifier. The remaining sampled line item should have been submitted with the KL modifier because ADS delivered the diabetic testing supplies by mail. ADS discovered this error during our audit and resubmitted the claim with the KL modifier. Consequently, this report has no recommendations.